Port of Tauranga is taking the lead on port rationalisation. Photo supplied.
Visits by larger container ships are on the horizon following
commitments made by freight company Kotahi to the Port of
Tauranga, Timaru's PrimePort and the world's largest shipping
However, with the arrival in two to three years of larger
ships to Tauranga, the fight will be on for survival of the
smaller New Zealand ports, a ''port rationalisation'' which
has been mooted for the past decade.
Freight company DCB International's director Mark Willis said
the pressure would mount for ports to host the ''big ship''
visits in both the North Island and South Island, increasing
from the present vessels rated 4100-4200 TEUs (twenty-foot
equivalent containers) to 6500 TEUs.
''This is the catalyst for the move to get bigger ships in
worldwide. Maersk want the largest ships and market
domination,'' Mr Willis said.
Kotahi, which is a joint venture between Fonterra and Silver
Fern Farms, yesterday announced separate commitments to
Tauranga, Timaru and Maersk to deliver freight over a 10-year
period, while Tauranga's port is to work toward hosting 6500
TEU vessels ''within the next few years''.
Tauranga's foray into South Island freight began last August
with a surprise move to take a 50% stake in Timaru's ailing
port, for almost $22 million.
Of 80,000 containers, Timaru had at one point lost 50,000 to
Lyttelton and almost 10,000 to Port Otago.
Last August analysts were unsure of the business model
Tauranga had in mind, but there was speculation at the time
Tauranga would try to attract a large shipping line to commit
to visiting Timaru. Mr Willis said the larger 6500 TEU ships
were faster, more fuel-efficient, could carry more containers
and were more eco-friendly.
For the past two years there had been no repeat of peak
season freight space shortages in the South, which suggested
the sector was ''over-tonnaged'' at present.
The scenario could see more downward pressure on pricing,
which would be good for exporters or, depending on how soon
Maersk bought in larger ships, some capacity could disappear.
Mr Willis emphasised South Island exports were growing, with
two new dairy companies contributing to increasing exports.
Kotahi chief executive Chris Greenough said Kotahi was
focused on helping keep New Zealand competitive on the world
stage, by paving the way for the new generation of container
vessels to call, delivering significant efficiencies for
exporters and importers. A key aspect of the agreements was
the continuing support for the long-term viability of New
Zealand's regional ports.
''Reflecting the strong growth of dairying exports from the
South Canterbury region over the past three years, it has
been possible to resume container-ship calls to the Port of
Timaru while also retaining significant volumes through Port
of Lyttelton and maintaining, long term, container-ship calls
at a number of other regional ports,'' Mr Greenough said.
As part of the Kotahi agreement, Tauranga would replace
rebates to Maersk by issuing 2 million new shares to Kotahi,
while Kotahi is to take a stake in the Timaru container
terminal, which Tauranga bought into last August. Maersk is
also introducing a new 4500 TEU service from Tauranga to
Malaysia in October.
At a glance
• Freight and logistics management company.
• Joint venture between Fonterra and Silver Fern Farms,
• Provides freight management for more than 30 customers from
sectors including meat export, wool, dairy, timber,
pharmaceuticals, horticulture and seafood.
• Specialises in matching freight requirements for export and
import businesses with ocean, rail, and road transport
(TEUs = 20-foot container equivalents)
• Kotahi to provide up to 1.8 million export TEUs to Port of
Tauranga (POT) during next 10 years, starting August 1.
• Kotahi to provide up to 2.5 million export TEUs to Maersk
Line during next 10 years, starting August 1.
• Kotahi commits to boost export cargo to Timaru Container
Terminal (owned by POT) for the next 10 years, starting
August 1. Target: 80,000 TEUs.
• POT commits to infrastructure investment, to deepen
shipping channel to enable visits from the larger 6500 TEU
container ships, within the next few years.